Banking Sector Competition in the Panzar-Rosse Framework and Net Interest Margins: An Empirical Analysis Using the General Method of Moments
This paper provides empirical evidence on the determinants of net interest margins in Central, Eastern, and Southeastern European countries (CESEE) during the period 1999–2009, with a particular focus on the relationship between banking sector competition and net interest margins. Using country-leve...
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
The Institute of Economics, Zagreb
2018-01-01
|
| Series: | Croatian Economic Survey |
| Subjects: | |
| Online Access: | https://hrcak.srce.hr/file/299080 |
| _version_ | 1797207622477152256 |
|---|---|
| author | Arben Mustafa Valentin Toçi |
| author_facet | Arben Mustafa Valentin Toçi |
| author_sort | Arben Mustafa |
| collection | DOAJ |
| description | This paper provides empirical evidence on the determinants of net interest margins in Central, Eastern, and Southeastern European countries (CESEE) during the period 1999–2009, with a particular focus on the relationship between banking sector competition and net interest margins. Using country-level Panzar-Rosse H-statistic estimates as a measure of competition, and the General Method of Moments, it has been determined that banking sector competition had a negative impact on net interest margins. In order to check for consistency, alternative measures of competition, such as the Lerner index and the Herfindahl-Hirschman index, have also been used. The results appear consistent and suggest that higher market power is associated with higher interest margins. A number of interactions have been used to check for the impact of competition when interacted with other variables. The study also provides evidence on the impact of other bank-specific, macroeconomic, and institutional variables on net interest margins. |
| first_indexed | 2024-04-24T09:25:50Z |
| format | Article |
| id | doaj.art-9008745c0cb7429ebcd4163586e62750 |
| institution | Directory Open Access Journal |
| issn | 1330-4860 1846-3878 |
| language | English |
| last_indexed | 2024-04-24T09:25:50Z |
| publishDate | 2018-01-01 |
| publisher | The Institute of Economics, Zagreb |
| record_format | Article |
| series | Croatian Economic Survey |
| spelling | doaj.art-9008745c0cb7429ebcd4163586e627502024-04-15T14:54:44ZengThe Institute of Economics, ZagrebCroatian Economic Survey1330-48601846-38782018-01-0120153610.15179/ces.20.1.1Banking Sector Competition in the Panzar-Rosse Framework and Net Interest Margins: An Empirical Analysis Using the General Method of MomentsArben Mustafa0Valentin Toçi1University “Kadri Zeka”, Faculty of Economics, Gjilan, Republic of KosovoUniversity of Prishtina “Hasan Prishtina”, Faculty of Economics, Prishtina, Republic of KosovoThis paper provides empirical evidence on the determinants of net interest margins in Central, Eastern, and Southeastern European countries (CESEE) during the period 1999–2009, with a particular focus on the relationship between banking sector competition and net interest margins. Using country-level Panzar-Rosse H-statistic estimates as a measure of competition, and the General Method of Moments, it has been determined that banking sector competition had a negative impact on net interest margins. In order to check for consistency, alternative measures of competition, such as the Lerner index and the Herfindahl-Hirschman index, have also been used. The results appear consistent and suggest that higher market power is associated with higher interest margins. A number of interactions have been used to check for the impact of competition when interacted with other variables. The study also provides evidence on the impact of other bank-specific, macroeconomic, and institutional variables on net interest margins.https://hrcak.srce.hr/file/299080bank competitionnet interest marginsPanzar-Rosse H-statisticGeneral Method of Moments |
| spellingShingle | Arben Mustafa Valentin Toçi Banking Sector Competition in the Panzar-Rosse Framework and Net Interest Margins: An Empirical Analysis Using the General Method of Moments Croatian Economic Survey bank competition net interest margins Panzar-Rosse H-statistic General Method of Moments |
| title | Banking Sector Competition in the Panzar-Rosse Framework and Net Interest Margins: An Empirical Analysis Using the General Method of Moments |
| title_full | Banking Sector Competition in the Panzar-Rosse Framework and Net Interest Margins: An Empirical Analysis Using the General Method of Moments |
| title_fullStr | Banking Sector Competition in the Panzar-Rosse Framework and Net Interest Margins: An Empirical Analysis Using the General Method of Moments |
| title_full_unstemmed | Banking Sector Competition in the Panzar-Rosse Framework and Net Interest Margins: An Empirical Analysis Using the General Method of Moments |
| title_short | Banking Sector Competition in the Panzar-Rosse Framework and Net Interest Margins: An Empirical Analysis Using the General Method of Moments |
| title_sort | banking sector competition in the panzar rosse framework and net interest margins an empirical analysis using the general method of moments |
| topic | bank competition net interest margins Panzar-Rosse H-statistic General Method of Moments |
| url | https://hrcak.srce.hr/file/299080 |
| work_keys_str_mv | AT arbenmustafa bankingsectorcompetitioninthepanzarrosseframeworkandnetinterestmarginsanempiricalanalysisusingthegeneralmethodofmoments AT valentintoci bankingsectorcompetitioninthepanzarrosseframeworkandnetinterestmarginsanempiricalanalysisusingthegeneralmethodofmoments |